Should You Avoid Gentiva Health Services, Inc. (GTIV)?

Is Gentiva Health Services, Inc. (NASDAQ:GTIV) a good investment?

In today’s marketplace, there are tons of metrics investors can use to watch Mr. Market. A duo of the most useful are hedge fund and insider trading activity. At Insider Monkey, our research analyses have shown that, historically, those who follow the best picks of the best money managers can beat the market by a solid margin (see just how much).

Equally as useful, positive insider trading sentiment is another way to analyze the marketplace. Just as you’d expect, there are plenty of incentives for an upper level exec to cut shares of his or her company, but only one, very simple reason why they would behave bullishly. Several academic studies have demonstrated the impressive potential of this method if you understand where to look (learn more here).

Keeping this in mind, let’s analyze the latest info surrounding Gentiva Health Services, Inc. (NASDAQ:GTIV).

Hedge fund activity in Gentiva Health Services, Inc. (NASDAQ:GTIV)

At Q2’s end, a total of 16 of the hedge funds we track held long positions in this stock, a change of -11% from the first quarter. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings substantially.

According to our 13F database, Adage Capital Management, managed by Phill Gross and Robert Atchinson, holds the biggest position in Gentiva Health Services, Inc. (NASDAQ:GTIV). Adage Capital Management has a $11.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Cliff Asness of AQR Capital Management, with a $10.7 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining hedge funds that hold long positions include Mario Gabelli’s GAMCO Investors, David Dreman’s Dreman Value Management and Joel Greenblatt’s Gotham Asset Management.

As Gentiva Health Services, Inc. (NASDAQ:GTIV) has experienced bearish sentiment from the top-tier hedge fund industry, we can see that there lies a certain “tier” of money managers that slashed their entire stakes last quarter. At the top of the heap, Neil Chriss’s Hutchin Hill Capital dumped the largest investment of the “upper crust” of funds we key on, comprising close to $0.6 million in stock, and Phil Frohlich of Prescott Group Capital Management was right behind this move, as the fund dropped about $0.4 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds last quarter.

What have insiders been doing with Gentiva Health Services, Inc. (NASDAQ:GTIV)?

Legal insider trading, particularly when it’s bullish, is at its handiest when the company in focus has experienced transactions within the past 180 days. Over the last half-year time period, Gentiva Health Services, Inc. (NASDAQ:GTIV) has experienced zero unique insiders buying, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Gentiva Health Services, Inc. (NASDAQ:GTIV). These stocks are Chemed Corporation (NYSE:CHE), Addus Homecare Corporation (NASDAQ:ADUS), Almost Family, Inc. (NASDAQ:AFAM), LHC Group, Inc. (NASDAQ:LHCG), and Amedisys Inc (NASDAQ:AMED). This group of stocks are the members of the home health care industry and their market caps are similar to GTIV’s market cap.